§ Standing Order (No. 142) read.
said, he rose to move that the Standing Order, which limited 1135 the owning or using by Railway Companies of steam-vessels, harbours, and docks, be repealed. By that order Railway Companies were prohibited from holding the description of property to which it referred, except on special grounds and in special cases, of which the Select Committee on the particular private Bill was to be practically the sole judge, being however required to make a Report to the House of the reasons on which it acted. When the order was agreed to by the House there might have been good grounds for passing it, inasmuch as Railway Companies possessed what was then the exceptional privilege of limited liability, which Shipping Companies and private owners had not: that state of things had passed away with the change in the law. It had been thought, too, that the rule would be acted upon, and that the exceptions would only be few in number; but during the last seven or eight years the exceptions had been more frequent than the cases in which the rule was observed. Many thought that what he proposed was to grant to Railway Companies power to hold this description of property without Parliamentary sanction; but it was not so. All the change he proposed was this—that the question, whether they should hold it or not, should go to the Committee upstairs unfettered by any previous declaration or rule of the House. In the early part of the present Session a Committee was appointed to look into the matter; and the Resolution which he submitted to the House was an embodiment of that Committee's Report. As the Standing Order related to little else than the prohibition, he believed the simplest course would be to repeal the whole of that order. The question really was whether Parliament should protect private owners against the superior wealth of Railway Companies. He did not see that it was their duty to do so. It might as well protect a private owner against a Ship Company, or a small Ship Company against a great Navigation Company. But it would not pay Railway Companies to interfere with the business of Ship Companies. No one could suppose that a Railway Company would think of putting on a line of steamers between Liverpool and New York, or between any English port and a port in the Mediterranean. The only kind of sea traffic into which they were likely to enter was that of conveying goods and passengers across a 1136 short sea, situated between two long continuous lines of land transit. They embarked in that sort of sea traffic in order to obtain greater facilities for through booking. But it was said that a Railway Company might obtain a monopoly as against a Ship Company by one of two means—either by refusing facilities, or by running steamers at a loss. At the present day the contest could hardly be one between a Ship Company and one Railway Company. Ten years ago it might have been, but now there was no important centre of trade in England which was not in possession of at least two Railway Companies. If there was, he could Answer for it that it would not be in that position much longer. Besides, the refusal of facilities was a matter with which Parliament could deal. It was not a thing which could be carried on privately. As for running steamers at a loss, any capitalist who wished to put down a competitor, and was willing to sustain a temporary loss in so doing, could do that already; but it would not be done, because the moment a monopolist attempted to profit by a monopoly obtained in that way, he was met by a new competitor. He could only make up for loss previously incurred by imposing high rates, and the moment he did so, he lost his monopoly. He believed that no injustice would be done by his proposition, and as he thought the Standing Order was not in accordance with sound principles of political economy, he begged to move its repeal.
§ Motion made, and Question proposed, "That the said Standing Order be repealed."—(Lord Stanley.)
§ MR. BARROW
said, he was afraid that the small interest the claims of which he was desirous of advocating was very much in the position of the little kingdom of Denmark in the grasp of Austria and Prussia. The monopoly of railways was becoming something gigantic, and no doubt the influence they possessed in that House was a great advantage to railway proprietors. Having had something to do with the drawing up of the Standing Order, he was very unwilling to see it repealed. The object of this Standing Order was to prevent the large capitals overpowering the small capitals, and to preserve to the public that competition which was necessary to secure them due accommodation. As matters stood at present, if a Committee before whom a Railway Company made applica- 1137 tion for powers, should report to the House that the Company was entitled to them, the House had opportunities to decide whether those powers should be conceded; but if the Order should be annulled there would then be no appeal. The application for the repeal of the Standing Order he believed proceeded from the extravagant ambition of railway directors, and he also objected to the proposal on the ground that it would give Railway Companies power to employ their capital for purposes different from those for which it was subscribed. He felt very strongly on the subject, and should certainly oppose the Motion.
§ MR. CLAY
said, he could not agree with the noble Lord that the practical effect of the repeal of the Standing Order would be very small; for, under a very modest title, he believed the House had rarely had to discuss a matter of greater national importance. The Standing Order imposed no prohibition on Railway Companies obtaining these powers; it simply threw on them the onus of proving a ease of public convenience, and wherever such a case was made out those powers were ordinarily granted under this Standing Order. If he felt certain that its repeal would do nothing more than it professed to do, he should have no fear of it; but he was afraid it would be taken as an invitation to Railway Companies to ask for these powers, and as an injunction to Committees to grant them. At least it threw on the shipowning interest the onus of proving that they ought not to be granted, instead of leaving it to Railway Companies to prove the necessity of them. The world was very much governed by phrases, and he believed that the noble Lord, and opinion generally, had been very much influenced by a phrase in a Report of the Board of Trade, to the effect that it was difficult to see how the great principle of competition could be advanced by the exclusion from competition of the largest capitals in the country. Yet this was easily seen. The railways, by their command of the land traffic, their power of juggling with fares, and their ownership, in many cases, of docks, piers, &c., had the power of placing obstacles so insurmountable in the way of their rivals, as to make competition practically impossible, and to create a monopoly for themselves. If it could be shown that public convenience required it, he was perfectly willing that the proposed change should take place. He 1138 would, however, defy any one who looked through the evidence which had been taken before the Committee to arrive at the conclusion that by giving to the Railway Companies increased powers that object would be attained. So far as he could understand, there were only two cases of public convenience which could be made out for acceding to the repeal of this Order. One was, where there was a large passenger traffic such as that between Dover, Folkestone, and Boulogne and Calais, Brighton and Dieppe, Southampton and Havre, and Kingstown and Holyhead, as to the last of which, although a Railway Company had the power now sought for it had never been exercised. The traffic between the places he had mentioned was carried on by independent Companies; and the other case was where, owing to some unusual state of things, as in the traffic between Harwich and Rotterdam, a special power was given to a Railway Company because the shipping interest had not supplied the accommodation which the public required. Some absurd and well-worn stories, repeated to half-a-dozen Committees of the House, had been told of the inconvenience caused by separate management; but all this evil was to be remedied by a system of through booking. On the other hand, he would ask whether hon. Members had never heard of inconvenience inflicted on the public by the Railway Companies themselves? Had they never heard of trains which took passengers booked for a particular place further than they wanted, and allowed them to get back again in the best way they could? It would be as unfair to use these instances as arguments against railways, as it was to quote the former exceptional cases against the shipping interest. And no case of public inconvenience having been made out, was it, he should wish to know, right to inflict on the shipping interest of the country a blow so great as that which was now levelled at them? Let the business in question be taken away from them, and one of the most paying portions of their trade would be destroyed. He thought that the repeal of the Standing Order would be taken as a distinct intimation that these powers should be granted to Railway Companies whenever they were asked, and they ought to be careful how they enlarged the great powers possessed by the large Railway Companies. In many parts of the coun- 1139 try they influenced Parliamentary elections, and the House of Commons contained many Members returned by the Railway interest and the Railway interest alone. Several years ago, when the East India Company had about as many seats in Parliament as the Railway interest had then, the circumstance was complained of as a great abuse; and he, at all events, was opposed to giving increased powers to these companies, to the prejudice of the shipowners of the country.
§ MR. RICHARD HODGSON
said, that if he apprehended that the removal of the Standing Order would injure the shipping interests, he would be one of the last to advocate the Motion of the noble Lord. So far as his experience went, he might add that Railway Companies were not anxious, under any circumstances, to obtain these powers to work steamboats if any other body of shipowners would conduct the necessary traffic to their satisfaction. His objection to the Standing Order was that it threw the onus of proof on the wrong party—upon those who brought forward the measure, instead of upon those who opposed it. While he wished the Standing Order to be expunged, he thought that whenever Railway Companies were about to ask powers to run steamboats the matter should be brought before the shareholders in the same way as extensions were dealt with. He thought the House should impose such restrictions as would ensure equality of treatment to persons on both sides of the passage. He should support the Motion of the noble Lord.
§ SIR HUGH CAIRNS
said, that the hon. Member for Tynemouth had given a very good reason why the House should not assent to the Motion. He told the House that Railway Companies were not particularly anxious to possess steamboat powers. They would as a rule only ask for them in cases in which they could induce no one to perform the sea service from their ports; but in such cases as that Companies might obtain these powers under the Order as it stood. If any Railway Company came before a Committee and gave good reasons why the powers should be granted, the restriction would be removed. It was only last year that three Railway Companies came before the Committee for these steamboat powers, and they were granted to them on the ground that it was wholly unlikely that any private Companies would perform the service. The hon. Gentleman had also recommended the 1140 House to agree to the Motion because Railway Companies were now doing that which was illegal. He hoped that the House would not give any weight to such reason. The Committee, for the Members of which, especially the noble Lord the Member for King's Lynn, who presided, he had great respect, were by no means unanimous in their recommendations, inasmuch as six members voted for the Report and four against it. They were entirely wrong when they represented that the main arguments which were employed against the proposition were that Railway Companies had the advantage of limited liability, and that they had a greater capital than was possessed by steamboat owners. He never heard any such arguments used in that House, nor were they employed by the witnesses who were examined before the Committee. The real argument, one with which the Committee had not dealt, was that a Railway Company which also had steamboats had, by virtue of its monopoly of the road, such a control of the traffic both in passengers and goods, that it could put it all into its own steamboats and prevent any portion of it going into the boats of an independent trader. His noble Friend said that he had heard evidence which satisfied him that the possession of these powers by Railway Companies would not injure private steamboat owners. That was a point which was easily settled. Of the four witnesses who gave evidence in favour of conferring these powers upon Railway Companies three were railway officials—secretaries or traffic managers—Mr. Forbes, of the London, and Chatham, and Dover; the manager of the Midland, and Mr. Eborall, the manager of the South Eastern. The fourth was an independent witness—Mr. Booth, the secretary of the Board of Trade. Mr. Booth admitted that if a Railway Company ran steamboats it would be able to drive, and probably would drive, every other company or owner of steamboats off the sea; but he said that he thought that the public convenience would thereby be promoted. When asked for an instance in which the public interest had been served by such a result, he referred to the case of the possession of the Holyhead steamers by the London and North Western Railway Company; but being, of course, at once reminded by a member of the Committee that those boats belonged, not to the London and North Western Company, but to the City of Dublin Steam-packet 1141 Company, he said that he had not looked into the matter and he was not aware of that fact. How did the Committee deal with that grave question, the really serious one in the case? They said that there would not be such a monopoly as was supposed, because there were very few towns to which there was only one railway; that if Railway Companies ran steamers at a loss for a certain time, the loss and inconvenience which would result to individuals was only an incident of unrestricted competition, and they suggested that security might be provided against the abuse of these powers by provisions that the faros should not exceed a certain amount, and that the Railway Companies should give facilities to traffic not intended for their own steamboats. There were, however, many ports to which there was only one railway, and even where there were two they would soon come to an arrangement between themselves as to the charge for and direction of the traffic; the word "competition" was entirely inapplicable to a contest between a private individual and a Railway Company, which could direct every single item of traffic to its own boats, and prevent any of it going to its rivals; and the suggested restrictions and provisions as to facilities would be wholly inoperative. And as to the passenger fares it was not high fares that the House was apprehensive of, as Parliament had already taken precautions to prevent that; and Railway Companies had the right of distributing the amount of their fares over the whole journey. It might therefore happen, that while their fares by sea were extremely low they made up the difference by increasing them on the railway part of the journey. In that way they might render it impossible for individual enterprise to compete with them by sea, while at the same time they re-imbursed themselves for any loss they sustained in that direction by increased fares in the other direction. The chambers of commerce, town councils, or corporations of almost every town in England and Ireland had petitioned against the alteration of this Standing Order, and he trusted that the House would maintain it in its present form, and require all Railway Companies who asked for steamboat powers to show good reasons why they should be exempted.
§ MR. MILNER GIBSON
said, the position in which the House was placed was this. Last year considerable complaint was made by hon. Members representing 1142 shipping constituencies, that the practice of Parliament, and the spirit of the Standing Order in reference to the question whether Railway Companies were to be owners of steamboats or not, did not accord. In consequence of that complaint a Select Committee was appointed to inquire into the question. The noble Lord the Member for King's Lynn (Lord Stanley) was appointed Chairman of that Committee, and, after hearing evidence, they made a Report recommending the House to repeal the Standing Order. They were now asked to disregard that recommendation, and to leave the matter precisely as it was before the complaints were made. If they did nothing, as the hon. and learned Gentleman (Sir Hugh Cairns) recommended, they would still be in this position—that their practice would be one way and their declared policy another. Since the year 1848 they had frequently granted to Railway Companies the powers in question. [Sir HUGH CAIRNS: And they had sometimes refused them.] Sometimes they had refused them. What the noble Lord proposed was that the Committee should be left to deal with parties asking for those powers according to the merits of their proposals. He did not ask the House to declare that in every case a Railway Company that came to Parliament seeking steamboat powers should have them. Nothing of the kind. What he said was this—Do not put any restrictions upon Committees; leave them to decide whether a case had been made out for granting the powers. Seeing that the Standing Order tended to mislead, the noble Lord asked them to repeal what seemed to give a direction to Committees which was not followed, leaving the matter to the free decision of the Committees, who could certainly decide whether it was for the public advantage or not that a particular Railway Company should have steamboat powers. He, for one, therefore, thought the noble Lord was right in his proposal. It must be remembered that if a Railway Company had a steam communication under its control it offered the public very great advantages. It gave the passengers the advantage of an undivided management from the commencement of their journey to the end, whether by land or by sea; and he contended that a person going from London to Paris, or to any port on the Continent, was in a better position if he were carried under such circumstances than if he had to pass through the hands of several Companies. If it were true that 1143 the independent steamboat was driven off; the line by the steamboat of the Railway Company, it would be only driven away because greater advantages were offered by the latter. He did not see what there was to prevent competition between independent steamboat Companies and Bail-way Companies. The Railway Companies could be prevented from giving preferences over their own line, and could also be prevented having fares unduly high. If they were to incur the risk of monopoly, it should be recollected that steam navigation Companies could establish a monopoly as well as Railway Companies. But steamboat Companies could charge their passengers what they pleased, whereas Railway Companies were restricted by their Acts in respect to their fares. Under these circumstances, he should give his support of the proposition of the noble Lord.
§ SIR JAMES FERGUSSON
said, if he had not been a member of the Committee in question he should not have troubled the House with any observations after the able speech of his hon. and learned Friend the Member for Belfast; but he could not allow the President of the Board of Trade to impress the House with the notion that the Committee were unanimous upon the question. The Committee had had a division, and although the opinion of the noble Lord had always great weight, nevertheless four members of that Committee differed from him upon the matter. The balance of evidence was in his (Sir James Fergusson's) judgment quite the other way—that being four witnesses in favour of the proposed change and nine against it. The main point to consider was whether the Standing Order did shut the door against the proposition, inasmuch as it gave the Committee authority to grant the powers asked for in case necessity was shown for the exemption of the particular company from the Standing Orders. There were several instances in which those steamboat powers were refused on the ground that no case had been made out to show that the public would reap advantage from the conferring of those powers upon Railway Companies.
§ MR. HORSFALL
said, he was anxious that the House should not be led away by the observations made by the President of the Board of Trade when he said that the practice of the House was different from its Standing Order. The Standing Order gave the Committee full authority to exempt a Railway Company from its 1144 operation if they made out a satisfactory case showing the public necessity of granting these steamboat powers. But the noble Lord now proposed to take away from Committees those powers which they possessed, and to throw upon the public the onus of showing that the powers were not required, instead of leaving Railway Companies under the obligation of showing that they were required. Now, what was everybody's business was nobody's business. The Railway Companies might, in that way, get the powers as often as they were asked for, even though the granting of them might prove detrimental to the public interests.
said, he wished to remind the House that every member of a Committee before whom a case of this kind came, had to declare that he was neither directly nor indirectly concerned in the matter, and that he would give his verdict fairly; but when the question was brought before that House, as they found by their experience of last year, there was a mercantile bias operating to induce their decision upon the point whether those powers should or should not be granted. When the Company with which he was connected applied for steamboat powers they first asked the Steam Navigation Company whether they would place steamboats upon the proposed line of communication, but they refused to do so. Even after they had obtained those powers they gave the Steam Navigation Company the option of placing their boats upon the station, when they again declined to do so. They subsequently informed the Steam Navigation Company, that if they sent into their harbours any boats they should have the same facilities and rights as the railway vessels possessed. He hoped that the House would not allow any mercantile feeling to influence their decision in the consideration of this question.
§ VISCOUNT GALWAY
said, the hon. and gallant Member who had just sat down was the last person who should have objected to these powers being given. The Bill he introduced was referred back to the Committee, and they unanimously decided that the Railway Company might have these boats, and they had the power of running steamboats.
§ COLONEL WILSON PATTEN
said, nothing could be fairer or more clear than the statement of the noble Lord the Member for King's Lynn. If the matter was really as he had put it he should have 1145 supported the noble Lord, but he did not look at it in the same light as the noble Lord. That was only one of a great number of Standing Orders which the House had adopted for the purpose of taking care that the reasons which had influenced the decision of the Committee on particular subjects which the House considered of great importance, should be especially reported to them. The very next order was one which negatived the power of the Committee to sanction a railway crossing on the level, unless it reported its reasons to the House for so doing. It was quite clear from the interest taken in the matter, that the subject was of too great importance to be lightly dealt with by the House, and without expressing an opinion upon the particular question as to whether Railway Companies should have steamboat powers, and having to a certain extent the charge of the Standing Orders of the House, he ventured to suggest that the House should not part with the power of enforcing on Committees the duty of giving the reasons on which they recommended legislation on certain points.
§ Question put, and negatived.